☰ My Favourites
×

Register or Login to save your list

Answers to YOUR Questions

See what's bugging others. 

And what our experts say.

ISA | Personal Finance | Junior ISA | JISA

Where can I get a good Junior ISA?

Rebeccah, Greater London

27 March 2019

show answer hide answer

Holly - 066.JPG

Holly Mackay

You need first to decide where to get the Junior ISA (which is the wrapper) and then decide what to put in it – cash, stocks and shares, funds etc.

 

We’re a bit suss on Cash Junior ISAs – if you’re saving for a baby then we think the stock market is likely to do better over the long-term. However there are good rates available for cash Junior ISAs – currently Nationwide and Coventry are offering 3.25% but these do change so please check online for current deals.

 

Many parents choose an investment platform for their stocks and Shares Junior ISA. Have a look at which ones we suggest here: Hargreaves is not the cheapest but they offer decent value and they are big and solid. Cheaper, but still good options, are AJ Bell, Charles Stanley Direct or Fidelity.

 

These platforms all offer a wide choice of investment options to put in a Junior ISA, too wide for many novices. That said, there are plenty of tools to help you find the right option: recommended fund lists and so on. In general, people tend to be over-cautious with their children’s money. You may have 15+ years to invest. That gives you a long time to ride out the ups and downs of a stock market. I know that people don’t like the thought that the capital value could drop, but over the long-term, the stock market generally outperforms cash.

 

For those new to investment, multi-manager funds might be an option. These are like ready-meals versus choosing the ingredients and making the meal. For less confident investors, it takes some of the pain away from choosing individual stocks or funds. Many of the platforms have their own versions – see here from Hargreaves Lansdown, AJ Bell and Charles Stanley Direct.

 

A cheaper option would be the Vanguard LifeStrategy 100% option, available through the Hargreaves platform. This is a passive fund and costs 0.24% instead of the HL Multi-Manager 1.46%. Passive funds are where computers just pick the world’s biggest stocks in proportion to their size. And if oil is out of favour, well you still have the oil shares. And if retail is going gang-busters, well you don’t get any more than the proportionate weighting. You are buying the average.

 

Active managers cost more because they employ expensive people to make a bet on which stocks will do better – if they love M&S, they can buy twice as much of it. If they hate Easy Jet they can sell it all. Passive guys can’t do this. They have to hold what we call the ‘index weighting’ – if HSBC is 5% of the main basket of shares, the FTSE 100, they have to hold 5% in HSBC shares.

 

Finally, in terms of paying into your Junior ISA, it is worth setting up a direct debit every month. That way, you drip feed into these and run less risk of investing when the market is at its highest, through simple bad luck and bad timing.

 

 

Just be aware...

We are not regulated to give personal financial advice - This isn’t full-fat regulated financial advice. Boring Money is a publisher and not regulated by the FCA. 

This means we can't help with specific personal circumstances or recommend specific investment products. It also basically means that if we say something daft, you have no recourse to come back and complain.

We’re only allowed to give you a steer or share an opinion or tell you the facts - That said, we promise that our answer to you is an independent unbiased perspective with no commercial gain to make. If you need regulated financial advice, you can find a good adviser via sites such as Unbiased & Vouchedfor.

Personal Finance | JISA | Junior ISA

Can I move an old Child Trust Fund?

Suzanne, Greater London

08 May 2018

show answer hide answer

Holly - 066.JPG

Holly Mackay

Hi!

In 2015 changes came in that meant that as the parent you now have the choice of transferring to a junior ISA if you wish.

This was a victory to parents for these babies born between September 2002 and January 2011, as Child Trust Funds (CTFs) were a great idea but pay worse rates than junior ISAs, available for children born outside these dates.

Both accounts allow up to £3,840 to be saved tax-free. CTFs were set up with Government vouchers of between £50 and £250, but parents are not given vouchers to fund junior ISAs.

Money in a CTF or a junior Isa cannot be withdrawn until the child's 18th birthday.

Hope this helps,

Holly

 

 

Just be aware...

We are not regulated to give personal financial advice - This isn’t full-fat regulated financial advice. Boring Money is a publisher and not regulated by the FCA. 

This means we can't help with specific personal circumstances or recommend specific investment products. It also basically means that if we say something daft, you have no recourse to come back and complain.

We’re only allowed to give you a steer or share an opinion or tell you the facts - That said, we promise that our answer to you is an independent unbiased perspective with no commercial gain to make. If you need regulated financial advice, you can find a good adviser via sites such as Unbiased & Vouchedfor.

JISA | Junior ISA | Investments

I would like to open a Junior shares ISA for my Grandson for about £50/month. How do I go about it and can you recommend some reliable companies? I intend to keep this going for approx 15 years, so am looking for some sort of 'Tracker' fund that does not need my constant attention.

Roger, Surrey

26 April 2018

show answer hide answer

Holly - 066.JPG

Holly Mackay

Hi Roger,

Lucky grandson! If you assume average returns of about 5% after fees, those monthly payments of £50 could add up to about £13,500 after 15 years. And of course that will all be tax free. Perhaps just make sure his parents know that he will get this money at the age of 18 so they can have the necessary conversation as this approaches. Hargreaves Lansdown is the country’s main provider of Junior ISAs and they report that about 97% of these get rolled over into adult ISAs which is encouraging – I thought more would be cashed in and used to head to Thai beaches!

OK, you want a tracker fund which is sensible if, as you suggest, you won’t have the time or inclination to be constantly monitoring this. Spreading your bets around make sense so what the industry calls a ‘multi-asset’ fund will get you the investment equivalent of a balanced meal – as the name suggests you’ll have a blend of shares and other investments from all over the world.

I normally try and give people a few options but for your needs there is a simple no-brainer option. Vanguard. The low-cost US Kings of tracker funds who now let British investors get a Junior ISA directly from them.

I suggest you pick one of their LifeStrategy funds. There are 5 choices – from very low-risk and cash like to the most volatile which is all held in shares. Given your timeframe which is 15 years I think you should be looking at the 80% or 100% equity options but read up on the differences between the options and make your own mind up, based on how comfortable you feel. As I suspect you know, making money is not guaranteed although over 15 years history strongly suggest you’ll outperform cash.

If you want other choices have a look at our Best Buys tables and filter by Junior ISAs. Another thing to bear in mind is this – if you or your children have an online investing account, then you might be able to link up the JISA account so you can see it on the same log-in. This is called ‘householding’ your investments and can make it more convenient to manage. But although you can pay in, a final note is that it has to be the parent or legal guardian of the child who actually opens the account for them. Once open, anyone can pay into it.

Good luck,

Holly

 

 

Just be aware...

We are not regulated to give personal financial advice - This isn’t full-fat regulated financial advice. Boring Money is a publisher and not regulated by the FCA. 

This means we can't help with specific personal circumstances or recommend specific investment products. It also basically means that if we say something daft, you have no recourse to come back and complain.

We’re only allowed to give you a steer or share an opinion or tell you the facts - That said, we promise that our answer to you is an independent unbiased perspective with no commercial gain to make. If you need regulated financial advice, you can find a good adviser via sites such as Unbiased & Vouchedfor.

JISA | Budgeting | Investments | Literacy for kids

I have a delightful 12 year old daughter and she has just opened her first bank account. I am dreadful with money but I would like to know what I should teach her so that she does not pick up my bad financial habits. Do you have some top tips of things to teach our children so they are wise and responsible with money please?

Louise, Greater London

11 September 2017

show answer hide answer

lesley-james.png (1)

Lesley James

Hi Louise. Wow, there are so many things I would say to my own younger self had I the chance, so its fantastic to hear your desire to help your daughter onto the right path.

Your daughter is not (yet) working, so for now, the money she sees being spent is your money. I would therefore suggest involving her in the household budget. Be open about decisions you make. And (if you’re brave enough) perhaps also about the impact of your own less than great decisions. You consider yourself ‘dreadful with money’ so, what have you had to sacrifice or miss out on as a result?

If you haven't already, then pocket money in exchange for completing certain tasks or simply passing over control of some of her personal expenditure will also help. The management of phone credit, for example, what is used, and what happens when it runs out. And let her put any savings she makes into that account she’s opened up.

Longer term, however, I have a tip for you both. In ‘The Richest Man in Babylon’ (George Samuel Clason), we are advised to ensure that “a part of all we earn remains ours to keep”. A tenth in fact, if possible. Or as Monica's father in Friends says "10% of your paycheck - where does it go?" (In the bank...)

Starting out with the attitude that you control your expenses and save often creates very positive life long habits. And wealth. Teaching your daughter could also be a great way to start trying to organise the same for your own finances.

Its never too late for us to make a difference to our long term financial health. Good luck, therefore, and happy saving.

 

 

Just be aware...

We are not regulated to give personal financial advice - This isn’t full-fat regulated financial advice. Boring Money is a publisher and not regulated by the FCA. 

This means we can't help with specific personal circumstances or recommend specific investment products. It also basically means that if we say something daft, you have no recourse to come back and complain.

We’re only allowed to give you a steer or share an opinion or tell you the facts - That said, we promise that our answer to you is an independent unbiased perspective with no commercial gain to make. If you need regulated financial advice, you can find a good adviser via sites such as Unbiased & Vouchedfor.

Sign up for Holly's blog

Stay up to date

Our free weekly blog with Holly's
no-nonsense opinions, tips & food for thought.
If you change your mind, you can unsubscribe at any time. We'll never share your details and you can unsubscribe any time.